CHINA Media Capital, the country's first private equity fund focusing on investment in the media industry, is to acquire a controlling stake in three Chinese TV channels and movie library content from News Corp, it said yesterday.
The deal is its first project since the fund raised its initial 2 billion yuan (US$295.5 million) in June this year.
The two parties will co-develop Xing Kong, Xing Kong International, Channel [V]'s Chinese mainland operations and the Fortune Star Chinese movie library and hope to explore new growth opportunities.
Established and approved by the National Development and Reform Commission in April last year, the fund has total assets of 5 billion yuan under management. It is backed by Shanghai Media Group, China Development Bank and China Broadband Capital and seeks investment opportunities in media business at home and abroad.
Wenhui-Xinmin United Press Group, which publishes Shanghai Daily, has injected 200 million yuan into the fund.
Jack Gao, vice president of News Corp and chief executive officer of Star China, will be CEO of the new joint venture, which will be based in the capital city of Beijing.
"The partnership is an extension of our long-term cooperation with News Corporation," Li Ruigang, chairman of China Media Capital and president of Shanghai Media Group, said. "The entry of Chinese capital into the international media market will help facilitate its changes and development and CMC will continue to develop operational and investment platforms for international media."
James Murdoch, chairman and chief executive officer, Europe and Asia, for News Corp, said: "The agreement with CMC recognizes the value we have created in Star China and enables us to continue to grow it for the future."
Last year, the government started to encourage media outlets to separate news reporting and editing operations from advertising, distribution and media-related investment business. The separation of production and broadcasting will boost efficiency as well as provide merger and acquisition deals in the domestic media sector, it said.
Last month, 12 cities, including Shanghai, Beijing and Hangzhou, were selected to carry out trial programs to converge broadcasting, telecommunications and Internet networks, allowing telecommunication and broadcasting companies to enter each other's business.